Cybersmear may be coming to a Website near you: a primer for corporate victims; how to respond or combat venomous comments from current or former disgruntled employees presents both legal and non-legal problems.

SAMUEL Taylor Coleridge wrote, "Whispering tongues can poison
truth." The Internet is no exception to this simple maxim. With one
of three Americans logging onto it daily, and at least 350 million users
worldwide by 2003, the Internet has the potential to become the
electronic rumor mill for the new millennium. (1)

Much of the time, online gossip is merely scurrilous and perhaps
embarrassing. For example, corporate executives and their alleged sexual
proclivities are favorite topics for online badmouths. (2) Sometimes,
however, boorish banter gives way to injurious falsehood. Consider the
story of popular cookie manufacturer Mrs. Fields. In 1996, speeding
along the information superhighway was speculation that the company
planned to donate pounds of cookies, brownies and other sweets to an
O.J. Simpson victory party. Despite its facial implausibility, this myth
inspired rumblings of a national boycott. Mrs. Fields was unable to
expose the hoax until it retained a public relations firm at great
expense. (3)

Then there is Varian Medical Systems, a publicly traded, Fortune
500 company with a market capitalization in the billions. Disgruntled
former employees posted more than 14,000 messages--on hundreds of
websites--accusing the company and its management of everything from
homophobia to pregnancy discrimination to the surreptitious videotaping
of public bathrooms. When Varian sued them for defamation, the
defendants turned around and created their own web site. Varian
prevailed on the merits after a protracted trial. (4) But as a practical
matter, it may have won the battle but lost the war. It incurred
substantial legal fees and generated negative publicity, but it has yet
to silence the defendants, who continue to lambaste the company on their
home page. The victory was bittersweet and more or less pyrrhic. (5)

As a general proposition, civil libertarians would applaud this
result. These activists insist that the typical action to suppress
online discourse is frivolous. It serves only to harass, they say, and
often offends constitutional rights, including those to privacy and free
speech. (6)

Taken to its extreme, this rhetoric brings David and Goliath into
the digital age: Corporations dig deep into their pockets to pay for
lawyers whose tactics aim to intimidate and ultimately muzzle
computer-savvy but underfinanced critics. (7) Whatever facial appeal it
may have, such hyperbole cannot withstand closer scrutiny. To urge that
corporate America seeks only retribution when it pursues scandalmongers
is to ignore certain economic realities and policy concerns.

When broadcast over the Internet, defamatory speech sometimes
causes substantial monetary losses, especially for publicly traded
companies. Stock prices can fluctuate wildly; their movement is a
function of information or, as the case may be, misinformation.
Cyberlibel can manifest itself not only as personal potshots that bruise
egos, but also as institutional slurs that move markets. Companies that
try to curb the dissemination of misinformation are improperly cast as
corporate bullies. Quite the contrary. These companies are honoring
their obligation to shareholders to attend to matters that jeopardize
reputation, brand name, and thus profitability. (8)

Unbridled innuendo has broader, systemically corrosive consequences
to society. It compromises meaningful dialogue. Cloaked in anonymity and
unencumbered by editorial filters, almost anyone with a computer can
take to the Internet and share their convictions with the world at
large. This has the cumulative effect of generating massive amounts of
conflicting information, the credibility of which is frequently beyond
evaluation. The online marketplace of ideas becomes increasingly
incoherent and in the final analysis struggles to fulfill what should be
its central role: an arena in which competing ideas collide, but out of
which the truth eventually emerges.

What are the theories of liability that corporate plaintiffs may
enlist to combat cybersmear campaigns? What are the pros and cons of
bringing suit? What are the alternatives to litigation? What preventive
measures are there to reduce both the incidence and the impact of
digital defamation?

THEORIES OF LIABILITY

While purveyors of fibbery are sued time and again for defamation,
other causes of action can lie against them. Depending on the facts,
they might be prosecuted for, among other things, violating securities
laws, breaching contracts, or diluting intellectual property. In any
event, affected businesses should appreciate that their options are not
necessarily limited to classic theories of defamation.

A. Defamation

1. Libel or Slander

There is a dearth of precedent as to whether electronic
communications are subject to the roles of libel, on the one hand, or of
slander, on the other. Doctrinally, this issue turns--obviously
enough--on whether such communications are more analogous to the printed
or the spoken word.

The same issue confronted the legal community when radio and
television first became popular. Initially, when broadcasters read from
scripts, libel provided the rule of law, but when they spoke
extemporaneously, slander principles applied. (9) Over time, courts
"recognized the breadth of exposure and resulting damage from
broadcast defamation was akin to published defamation, and began to
apply libel standards to broadcast defamation." (10) Today
television stations are considered publishers of libelous material, with
limited exceptions to this rule, (11) notwithstanding any absence of a
script. (12) To the extent that the Internet is susceptible to
classification, it has evolved into an interactive blend of print and
broadcast media. (13) Courts should be expected to invoke libel, as
opposed to slander, in online defamation cases. (14)

This observation is hardly just an academic one. It has practical
and, for that matter, positive ramifications for corporate victims of
cybersmear. At common law, a prima facie case of slander requires a
greater quantum of proof. In particular, the slander plaintiff must
demonstrate that which the libel plaintiff need not: special damages, as
distinguished from actual or general damages, or, stated differently,
actual pecuniary harm. (15)

In a libel action, that is to say, plaintiffs must establish only
injury to reputation; they need not go a step further and prove
resultant economic damages. The underlying rationale is that the
relative permanence of the written word raises a presumption of harm,
whereas the ephemeral qualities of speech cannot occasion a similar
inference.

Modern jurisprudence, however, is in some instances collapsing the
distinction between libel and slander. As a result, some states--most
notably, New York--have begun to require proof of special damages even
when libel is the theory on which suit has been brought. (16)

Legal philosophy aside, the bottom line is clear: if cast in the
role of defamation plaintiff, a corporation, whenever possible, should
proceed under a theory of libel rather than slander. While in the final
analysis the former may prove only marginally easier to maintain, common
sense alone dictates that no advantage go unexploited.

2. Libel Defenses

Even though special damages are often not a prerequisite to
recovery, libel remains a notoriously difficult cause of action to
prosecute successfully, (17) not because of a high prima facie hurdle,
but because of a panoply of privileges and affirmative defenses that do
not lend themselves to refutation. (18) Figuring most prominently among
them is, of course, the First Amendment.

a. Constitutional Privileges

(i) Opinion

Opinions are tantamount to ideas, the policing of which is rightly
the province of neither judges nor juries. Opinions are often not
actionable under a theory of libel, (19) but the U.S. Supreme Court has
stressed that its decisions have stopped short of carving out a
wholesale defamation exemption for "opinion." (20) Indeed, to
the extent it serves as a defense to libel, opinion is narrowly defined
and reaches only statements that cannot be proved false or that cannot
be reasonably interpreted as stating actual facts about an individual.
(21)

Because of this closely circumscribed definition, accused libelists
cannot escape liability by qualifying their defamatory utterances with
the caveat that they were merely expressing opinions, rather than
statements of fact. Accepting such superficial assurances at face value
would elevate form over substance in an flourish of naivete. (22) As the
First Circuit has put it, "to say `I think' is not enough to
turn fact into opinion, where what is supposedly `thought' is, or
implies, a proposition of fact." (23)

The question becomes: Under what circumstances will a statement,
however unflattering, find refuge under cover of opinion? Because libel
cases are almost invariably fact-intensive, a satisfying answer is
difficult to come by. One federal judge has ventured that a statement
takes on the character of opinion "where it involves expressions of
personal judgment, especially as the judgments become more vague and
subjective in character." (24)

In effect, courts subscribe to that kernel of wisdom first inspired
by bullies and hatched in playgrounds: "Sticks and stones may break
my bones, but names will never hurt me." While the adage is a
simple one, subsumed under it is an important lesson: Corporate managers
must recognize the difference between the truly pestilent and the merely
vulgar and indecorous--the stuff that batters big egos, rather than big
profits. Legal action properly presents itself as an option only with
respect to the former genus of online opprobrium.

(ii) Parody

Satire is everywhere, and perhaps due in part to its prevalence, it
frequently lies outside the bounds of actionable defamation. "There
is no libel," according to one appellate court, where the
"material is susceptible of only non-defamatory meaning and is
clearly understood as being parody [or] satire." (25) That is not
to say, however, that the comedian enjoys a license to defame.

What sets parody apart from other strains of humor is its essential
character, one of conspicuous "distortion and exaggeration. [L]ike
the warped and curved mirrors in a carnival fun house, it depends upon
the grotesque for its effects." (26) Stated differently, parody can
be mistaken for nothing else, and its satirical nature is immediately
self-evident. For that reason, a parody necessarily cannot "defame
... by false attribution or presentation of false facts." (27)

Corporate executives must recognize that they and their companies
may become fodder for satirists whose work appears on web pages, in
discussion groups, or in chat rooms. This bothersome reality is best
viewed as a cost of doing business, rather than a reason to retain
counsel. Although it is frustrating to be the butt of a joke built on
hyperbole or tall talk, the law simply offers little relief to those
whose only complaint is that they have been reduced to caricatures.

(iii) Public Figures

Commenting on the debate surrounding the highly publicized
shootings of four teenagers in a Manhattan subway, a New York judge
opined that it "is a paramount interest of a free society to assure
that open and spirited discussion of matters of public concern will not
be chilled by the threat of litigation." (28) Such unabashed
endorsement of the marketplace of ideas harkens back to a landmark
decision of the U.S. Supreme Court, New York Times Co. v Sullivan, (29)
in which the Court held that public officials and figures may recover
for defamatory statements only when the statements are made with
"actual malice"--that is, with knowledge of their falsity, or
with reckless disregard for the troth.

Defining who are public figure, however, is no easy task. At the
risk of oversimplification, it may be said that public figures typically
hail from one of two factions: those who "occupy positions of such
persuasive power and influence that they are deemed public figures for
all purposes" or those who "have thrust themselves to the
forefront of particular public controversies in order to influence the
resolution of the issues involved." (30)

Examples of the sorts of personalities that courts have classified
as public figures include political activists, candidates for office and
even football coaches who become state university athletic directors.
(31) Natural extensions of these examples would include executives at
major corporations who become ensnarled in controversies implicating
matters of public concern. Take, for instance, Bill Gates, founder of
software giant Microsoft. His antitrust debacle with the Justice
Department has transformed him into the archetypal public figure,
perhaps explaining why he has become a favorite subject for editorial
cartoonists whose works are scattered far and wide across the Internet.

Gates--or, for that matter, anyone similarly situated--could
proceed against his critics only with great difficulty, since they could
almost certainly avail themselves of the heightened actual malice
standard. Perhaps more important, for a public figure to initiate a
libel action is often to ignite a public relations nightmare.

Besides, litigation is not necessarily the most effective solution
for a prominent persona. Abraham Lincoln said that "truth is
generally the best vindication against slander." In this respect,
"public figures usually enjoy significantly greater access to the
channels of effective communication and hence have a more realistic
opportunity to counteract false statements then private individuals
normally enjoy." (32) Since both the courts and the public at large
are keenly aware of this imbalance in power, the corporate behemoth that
accuses a single, vociferous individual of defamation may appear to be
using the law not as an instrument of justice, but instead as a tool of
coercion.

2. Common Law and Statutory Defenses

a. Anti-SLAPP Legislation

Home to Silicon Valley and its hotbed of Internet start-ups,
California has erected a heightened barrier to recovery for online
defamation--the Strategic Lawsuit Against Public Participation Act,
conveniently known by the acronym SLAPP. (33) On a legislative finding
that "a disturbing increase in lawsuits brought primarily to chill
the valid exercise of the constitutional right of freedom of
speech," the legislation requires libel plaintiffs to establish a
likelihood of success on the merits before trial. Should they fail to
make this showing, they subject their defamation claims to a special
motion to strike, which generally will succeed if the challenged
statements amount to acts in furtherance of the right of "petition
or free speech," which are defined as, among other things,
"statement[s] or writing[s] made in a place open to the public or a
public forum in connection with ... issue[s] of public interest."

Referring to this language, a California appellate court ruled that
Internet discussion groups about the management of publicly held
companies are "open and free to anyone who wants to read"
them, are relevant to matters of public interest, and are thus
"public forums" for purposes of the legislation. The court
then recognized a range of comments from one such discussion group as
"disparaging" but nonetheless non-actionable. (34)

At least a dozen other jurisdictions--including New York,
Massachusetts and Florida--have enacted similar statutory schemes. (35)
Legislators have not ignored the public perception that, through
predatory litigation tactics, big business sometimes exploits the power
and resources it has. Before dragging cyberlibelists into court, large
corporate entities should be certain that their claims are not just
legally cognizable, but also are compelling, persuasive and meritorious.
Otherwise, libel defendants may reach up their sleeves for an anti-SLAPP
statute, use it to cast themselves in the role of David and garner the
sympathy that courts often afford the underdog.

b. Retraction Statutes

Ordinarily, the public retraction of a libelous statement does not
defuse liability but does mitigate damages. (36) While historically a
function of common law, this principle today is embedded in so-called
"retraction statutes," which provide that the timely
renunciation of defamatory declarations will serve to limit damages,
usually to those for actual harm. (37)

For purposes of online defamation, however, retraction statutes may
offer little or no shelter to average defendants, who often are
individuals, acting alone or in collaboration with a few friends, and
who spread their word on electronic bulletin boards, in Internet chat
rooms and on independent web sites. Retraction statutes typically reach
members of the media, to the exclusion of all other classes of libel
defendants. (38)

A widely cited decision from the Wisconsin Court of Appeals
illustrates this. In It's in the Cards Inc. v. Fuschetto, (39) the
court held that a trial judge had erred by granting summary judgment to
the defendant, on the grounds that the plaintiffs had never demanded a
retraction pursuant to a state statute. Rosario Fuschetto, the
defendant, had made a series of allegedly defamatory statements about
the plaintiffs, a sports memorabilia store and its owner. Fuschetto
posted his statements on an electronic bulletin board to which a
community of subscribers had open access. The court held that the
Wisconsin retraction statute did not apply to bulletin board postings
because they do not constitute a "publication" according to
its ordinary meaning.

In the end, corporate victims of cybersmear, if they elect to
pursue their harassers in court, usually can dispense with concerns over
retraction statutes--at least with respect to the merits of their cases.
Even when retraction laws are facially inapplicable to non-media
defendants, badmouths who voluntarily forswear their words still can
insulate themselves from liability, albeit not completely, because,
however motivated, retractions will tend to breed evidence of good faith
and thus mitigate damages. (40)

c. Statutes of Limitations

The limitations period for a libel claim customarily begins to run
upon the publication of the purportedly libelous material. Establishing
the date of publication for libel appearing in a book, newspaper or
magazine is a relatively straightforward task. The same cannot be said
of libel that manifests itself on the Internet.

The dynamic nature of the online community is to blame--or, as some
may see it, credited--for this difficulty. Unlike those memorialized on
paper and in ink, messages broadcast on the Internet can propagate at
truly exponential rates. This robust proliferation is attributable to a
variety of causes, so-called "hypertext" perhaps the most
prominent among them.

Hypertext lies at the heart of the Internet and the programming
language--hypertext markup language, commonly referred to as HTML--that
gives it interactive life. At the risk of oversimplifying matters,
hypertext has been defined as "any text that contains links to
other documents--words or phrases in the document that can be chosen by
a reader and which cause another document to be retrieved and
displayed." (41) Since ramping onto the Internet has become an
inexpensive proposition, the likes of hypertext and the complex network
of interconnectivity that it inspires can transform a person's
keystrokes into gospel for the masses.

Aside from its practical implications, hypertext raises
jurisprudential concerns over the time at which claims for cyberlibel
accrue. "Under the single publication rule," one commentator
has written, "a cause of action accrues at the time of the original
publication; therefore, subsequent shipments and ... reprintings of the
same edition of the work do not extend the date." But, at the same
time, "reprintings of a book in a new edition ... will usually
constitute a new publication of the libel." (42)

While application of these rules is simple enough for print media,
their extension to the digital frontier is awkward. The fundamental
nature of the World Wide Web---and the billions, if not trillions, of
hypertextual links populating it--blur the distinctions between
reprinting and subsequent editions. To date, the courts have offered
next to no guidance on this issue. While this is sure to change over
time, libel plaintiffs must for the moment arm themselves only with the
knowledge that defenses based on limitations periods may present issues
of first impression that require creative argumentation rather than
extensive reliance on existing precedent.

d. Insulated ISP

Deep corporate pockets are on the short list of defendants in just
about any tort action. Libel claims are no different. Unlike print media
giants, however, Internet heavyweights can often find asylum from
defamation in a unique array of defenses. In this way, libel plaintiffs
inevitably face uphill, if not impossible, battles when matched against
the likes of America Online, Yahoo! and other web portals and internet
service providers (ISPs).

Among the most potent of these defenses is the Communications
Decency Act of 1996 (CDA), 47 U.S.C. [section] 230 et seq. Enacted to
overrule a decision of a New York trial court, (43) the CDA states that
"no provider or user of an interactive computer service shall be
treated as the publisher or speaker of any information provided by
another information content provider." This Good Samaritan
provision, as it is frequently called, has been construed to largely
immunize the ISP industry against defamation lawsuits.

In Zeran v. America Online Inc., (44) for example, a Virginia
federal district court refused to hold America Online (AOL), the largest
ISP in the United States, accountable for a series of profoundly
distasteful messages that one of its users had posted to an AOL bulletin
board. The messages advertised tee shirts containing slogans that joked
about the 1995 bombing of the federal building in Oklahoma City. Worst
of all, the name and telephone number of the plaintiff, Zeran, were
included in the messages, although he had absolutely nothing to do with
them. He was inundated with a barrage of harassing telephone calls, a
number of them threatening his life.

Alleging that it failed to take timely steps to delete the messages
and to cancel the account of the offending user, the plaintiff sued AOL
for his monetary loss and emotional suffering. Laboring under the
express terms of the CDA, the district court was all but obligated to
reject his claim pursuant to a theory of statutory immunity.

The legal hurdles to prosecuting an ISP for the defamatory remarks
of its users carry dire consequences for the cyberlibel plaintiff.
Because of the inherently anonymous character of the Internet, to try to
identify an online defamer may be to attempt the impossible. (45) So
with ISPs shrouded in statutory protections and libelists cloaked in
anonymity, parties aggrieved by cybersmear may be left with fingers, but
with nowhere to point them.

B. Collateral Theories of Liability

Although defamation is the most obvious theory on which cybersmear
plaintiffs may rely, creative litigants can sometimes turn to other
causes of action in their pursuit of online irritants. In this realm,
however, the law is in the throes of infancy and thus remains a
necessarily scant and often unsettled lot.

1. Employment Relationship

Unhappy, disgruntled current and former employees comprise a common
class of cyberlibelists. (46) Armed with inside information, office
gossip and axes to grind, they have used the Internet to launch attacks
against corporate entities big and small. Sometimes, these offensives
are not defamatory but are in derogation of contracts attendant to the
employment relationship.

The execution of a confidentiality or nondisclosure agreement is
becoming an increasingly standard term of employment, especially in
high-tech industries. (47) When drafted broadly enough, they can endow
employers with an instrument to silence detractors who are a drain on
more than just their payrolls. Of course, shrewd employees--versed in
the contractual prohibitions to which they are subject--can skirt the
edges of confidentiality agreements, for instance, by carefully
eschewing references to trade secrets, proprietary data and related
varieties of sensitive information.

Dissatisfied employees who grumble, gripe and grouse over the
Internet also may violate provisions embedded in employment manuals or
other internal company policies. Several legal commentators have alluded
to this possibility, (48) which presumably would at a minimum help
justify the discharge of refractory employees.

2. Securities Laws and Business Torts

Transmitted via the Internet, false or otherwise misleading reports
about a company, especially those opining on its financial stead or its
business prospects, can wreak immediate and sometimes irreversible
havoc. When this happens, affected companies should look beyond
defamation law to vindicate their rights. In Hart v. Internet Wire Inc.,
(49) for example, a former employee of the defendant news wire concocted
a phony press release about Emulex Corp. After short selling large
blocks of Emulex stock, he sent the release to Internet Wire, which then
published it. The bogus release subsequently was redistributed by
Bloomberg News, another but much larger news service. Predictably, the
price of Emulex stock plunged to $60 a share in just 15 minutes.

The plaintiff sued under color of federal law, alleging that both
Bloomberg and Internet Wire had run afoul of Section 10(b)(5) of the
Securities Exchange Act of 1934. Although the plaintiff later succumbed
to a motion to dismiss, his claim failed only because neither defendant
had published the fictitious press release with the requisite
scienter--that is, an intent to defraud or with fraudulent intent.

Under slightly different facts, in other words, the plaintiff could
have successfully prosecuted his 10(b)(5) claim. In fact, recognizing
the vast potential for the manipulation of stock prices through online
embroidery, the Securities and Exchange Commission has established an
Office of Internet Enforcement, which employs about 60 attorneys
"who devote substantially all of their time to [the] detection and
investigation of fraud on the Internet." (50) The plaintiff might
also have brought a derivative action against the author of the press
release for, among other things, commercial disparagement, sometimes
known as trade libel, (51) and tortious interference with business
relations.

So, while it may generally be the most apposite, libel is not
necessarily the only theory of liability that can ensnare digital
defamers.

3. Intellectual Property

When corporations are derided online, their intellectual property
is frequently implicated. Often, their trademarks are co-opted,
inextricably entwined in defamatory speech. By way of example, one web
site--aolsucks.org--depicts the strangulation of a cartoon figure whose
head bears a striking resemblance to the AOL logo and its familiar
triangular design. Surrounding the image is a collection of caustic
anecdotes about the company and particularly about the quality and
reliability of its services. (52) AOL might argue that its distinctive
insignia, which it promotes at an annual cost in the millions, (53) is
diluted when positioned beside an array of denigrating comments.

Trademark dilution is actionable under 15 U.S.C. [section] 1127,
which defines it as the "lessening of the capacity of a famous mark
to identify and distinguish goods or services, regardless of the
presence or absence" of competition among the parties or any
likelihood of confusion. Dilution can manifest itself in two ways:
through "blurring," when a mark is attributed to goods or
services neither produced nor delivered by the trademark owner, or
through "tarnishment," when a mark is enlisted so as to taint
or debase it. (54)

Dilution claims, unlike those for trademark infringement, can
succeed without first establishing any likelihood of confusion. Instead,
plaintiffs need only show that the mark is famous and that the defendant
is blurring its distinctiveness or tarnishing its prominence through
some commercial application. (55) Since this standard obviously differs
from that for libel, a dilution claim, depending, of course, on the
facts, may present itself as an alternative means of proceeding against
a libel-proof plaintiff.

TO SUE OR NOT TO SUE

So much for theory. The question is no longer how to sue, but
whether to do so at all. If the answer is yes, corporate plaintiffs
should recognize the inevitable extralegal consequences and understand
how to neutralize them. And, if the answer is no, the savvy lawyer will
be attuned to and prepared to implement any number of alternatives to
litigation.

A. The Pros

The advantages to combating corporate cybersmear through litigation
are two-fold. On one hand, there are upsides that exist on a purely
legal plane. At the same time, formal proceedings can occasion a range
of positive, extralegal effects. They can, for example, sponsor larger,
systemic values and, not least of all, act as a visible and powerful
deterrent for aspiring libelists.

As an altogether legal matter, successful online defamation claims
serve at least two ends. First, they promote finality. By seeking
appropriately broad injunctive relief, plaintiffs can rest somewhat
easier knowing that if detractors succumb during litigation but later
resurface, emboldened anew, they will already have an equitable judgment
in hand. Unburdened by any threshold inquiries into liability, aggrieved
corporations can focus on enforcement alone, and thus bring a more rapid
end to their problems.

Second, a victory on the merits can establish valuable precedent.
Because Internet libel is in its formative stages, visible companies
subject to public scrutiny might be wise to shape the doctrines
developing around cyberlibel in ways consonant with their best
interests. Otherwise, lobbies on the opposite side of the aisle--the
American Civil Liberties Union, the Digital Freedom Network and the
Electronic Privacy Information Center, to name but a few--may make a
point of getting in on the ground floor. By undertaking the defense in
the early waves of cases, they may set the sort of speech-protective
precedent that elevates personal freedoms over the right to seek redress
of reputational wrongs in a court of law.

Extralegally, corporations emerging victorious from cyberlibel
suits can generate disincentives for armchair malingers who harbor
disparaging thoughts, but have yet to graft them onto some Internet
outpost for mass consumption. While any publicity surrounding online
defamation cases may generate bad press for the plaintiff companies, the
limelight also can illuminate a blunt message: Proceed at your own risk.
Because the anonymity of the Internet widens comfort zones even for the
ordinarily risk-averse, it may be incumbent on corporate America to
remind the public that torts are no less actionable when committed on
the Internet.

From a broader perspective, cybersmear has palpable systemic
effects that threaten the very evolution of the Internet. While it
serves as a vehicle for entertainment and other varieties of lighter
fare, the Internet is first and foremost a mechanism for gathering and
disseminating information. In this sense, it was dubbed the
"Information Superhighway" because of its unique potential for
delivering knowledge to populations everywhere. Since information and
power go hand in hand, if the Internet is impaired in its ability to
share the former with the world at large, its role as the great
equalizing force of the new millennium will be compromised.

Inasmuch as its essence borrows from that of a program of
misinformation, cybersmear hampers public discourse that is truthful,
ingenuous and thus meaningful. Veiled in anonymity and emancipated from
editorial oversight, anyone with access to the Internet can spread
deceptive propaganda around the globe. This might have the over-all
effect of spawning vast bodies of conflicting information, the
reliability of which often cannot be assessed. In this way, the Internet
may be infected with falsehoods that will never be identified as such in
the online marketplace of ideas.

Companies that take cyberlibelists to task will work toward
eliminating this dynamic, and will thus do their part, however small, to
contribute to the public good.

B. The Cons

Taking to the courts in pursuit of digital mudslingers is not
without its fair share of distinct disadvantages. The biggest concern is
that a lawsuit will simply exacerbate the visibility and thus the impact
of the alleged defamation.

In particular, so-called "backlash" websites can be
nightmares; recall the plight of Varian Medical Systems. Although the
company won a series of legal victories, it thereby aroused the wrath of
two past employees whom it had accused of libel. In time, making matters
even worse, the backlash website gave rise to several collateral
complications: republishing and a new phenomenon sometimes known as
"spamdexing."

As its name suggests, republishing refers to the distribution of
libelous statements through an outlet other than the original host. Such
secondary outlets are usually members of the media. Spamdexing, a
nouveau term of art, pertains to "a modern variant on long-utilized
systems of keyword indexing." (56) Specifically, the process
involves the abuse of "meta tags"--words and phrases
transparently implanted in web pages to facilitate their indexing by
search engines. (57)

Apparently through the manipulation of meta tags, the Varian
defendants were able to raise the profile of their website on popular
search engines Yahoo! and Google. Of the more than 10,800 destinations
containing the phrase "Varian Medical Systems," the site
operated by the defendants was listed third, directly beneath an
official Varian home page. (58)

Because spamdexing can be so effective, the reach of backlash sites
should not be underestimated: If properly coded, they will not
necessarily wallow in obscurity.

A parade of other drawbacks can follow the decision to file suit,
the cost and uncertainty of litigation marching at the head of the pack.
Corporate executives should be sure to put fiscal realities before their
own pride. To be attacked is not necessarily to suffer any genuine harm.
Put another way, ego has no place in the process of deciding whether
libelous statements threaten the sort of damages which would warrant the
time and expense of litigation.

Each of the following, however, are among the many other factors
properly put into the balance when exploring the expedience of
initiating legal action: the potential impact on public image,
especially the perception of the plaintiff as a monied corporate tyrant;
the consequent costs of remedial public relations initiatives; and,
finally, the difficulties in identifying and later satisfying a cash
judgment against an individual defendant who is swathed in anonymity but
not in wealth.

C. Alternatives to Litigation

It should come as no surprise that businesses affected by
cybersmear can vindicate their rights through means other than
litigation. The most common and often the simplest and most effective
approach is a cease-and-desist letter. Because the Internet is a virtual
costume ball--with the identities of its millions of guests hidden
behind masks of an intangible sort--the perceived anonymity of online
speech lulls many into a false sense of invincibility. When the
mythology of unassailability is shattered on receipt of a sternly worded
letter from an attorney, the average muckraker is quick to apologize and
retract the causidical statements.

Taking coordinated, cooperative action with the appropriate ISP is
a second possibility. Ordinarily, web surfers are required, even if only
impliedly, to consent to certain terms of use before logging onto the
Internet or viewing a home page. (59) The Microsoft Network, for
instance,

reserves the right at all times to disclose any
information as Microsoft deems necessary to
satisfy any applicable law, regulation, legal
process or governmental request, or to edit,
refuse to post or to remove any information
or materials, in whole or in part, in Microsoft's
sole discretion. (60)

The effect of such language is to imbue service providers with the
unilateral authority to regulate their domains as they see fit. And,
while the typical ISP is immunized against liability for the statements
of its users, no one likes trouble. From this perspective, a corporation
portrayed in a patently offensive light may discover that the ISP, which
hosts the objectionable content or user, prefers to delete the material
summarily or revoke the membership of the offender, rather than risk
entanglement in litigation. (61)

Another option, albeit a riskier one, is to counteract
cyberlibelists with a dose of their own medicine. By publicly responding
to them in their own forum, a defamed company can try to set the record
straight. Defusing and discrediting revilers on their own turf has the
added advantage of communicating with the same general audience to which
the tortfeasor first appealed. The downside, however, is that the
calumniators may be provoked into intensifying their crusades. Should
this occur, company officials are left with two choices, both
unenviable: continue the dialogue, which could rapidly degenerate into
an obtuse slugfest; or, withdraw from the exchange, which can smack of
giving up or, even worse, of conceding the truth of the objectionable
statements.

Last, a company may do nothing as an external matter, while at the
same time taking internal steps to lay the foundation for litigation. To
this end, it must preserve some evidence of the offending statements.
Given the temporary nature of Internet content, the aspersive language
inherently will lack permanence, and it should be documented to prepare
for future legal action.

D. Corporate Pre-emptive Measures

Although it may be impossible to eliminate them entirely, both the
incidence and the impact of cybersmear can be lessened by taking certain
precautions. First consider the story of one Jeremy Dorosin, who had
bought an espresso machine from coffee giant Starbucks. Apparently, the
machine was defective, and Starbucks never sent Dorosin the
complimentary coffee that was to accompany his purchase. When Starbucks
refused his demand that it replace the broken machine with one costing
thousands of dollars more, Dorosin took out a full-page spread in the
Wall Street Journal. The advertisement invited readers to voice their
complaints about Starbucks by calling a toll-free number that Dorosin
had established, or by visiting "starbucked. com," a website
that also included a detailed account of his problems with the coffee
company. (62)

The advice to glean from the foregoing episode should be obvious.
Preemptively register unflattering domain names that co-opt your
corporate identity. Purchase Internet addresses in bulk; they can be had
on the cheap. Especially for large, publicly held companies, the annual
cost will be de minimis.

Next consider that the unseen enemy is bad enough, but that the
unknown enemy is even worse. Accordingly, businesses must devise some
means of monitoring the Internet for defamatory materials concerning
them, their products and services, as well as their individual officers,
directors and key employees. All but the largest entities will be best
served by outsourcing this responsibility to any of the growing number
of third-party services that specialize in scouring the web for
derogatory references to their corporate clients. (63)

Third, the prudent company will plan now for what has yet to come.
Vicious rumors can materialize on the Internet out of nowhere, and will
sometimes spread like wildfire. If it becomes necessary to undertake
some form of damage control, a contingency plan--or the lack
thereof--may mean the difference between the effective and the feckless
response strategy. Caught off guard, a firm layered in bureaucracy may
struggle to first formulate and then execute a rapid, but still measured
rejoinder.

Last, a timeless truth deserves repeating. Those closest to us
sometimes hurt us most. For present purposes, the sentiment is intended
to underscore the fact that corporate cyberlibel recurrently comes from
within. (64) Although employers can exercise little or no control over
the after-hours activities of their employees, vigilant companies can
regulate behavior to a much greater extent during the work day. Woefully
behind the times is any modern business that has yet to promulgate and
enforce stringent company policies for the use of electronic mail and of
the Internet generally.

While some employees will inevitably break the rules, others at
least will reflect on them and think twice before using an office
computer to speak out against their employer. With such policies in
place, transgressive employees also may subject themselves unwittingly
to liability not only in tort, but also in contract.

CONCLUSION

To call the Internet a new frontier is by now a misnomer. Its reach
is global, its content consumed by billions, and almost anyone with a
computer can tap its power. The Internet is becoming a bully pulpit from
which the disgruntled broadcast their frustrations to the world at
large.

Squarely in their crosshairs--much like politicians, celebrities
and other magnets for public attention--will be corporations the world
over. Because that much is inevitable, companies today must understand
the intricate contours of the problem, appreciate both their legal and
extralegal options, and prepare themselves--now, rather than later- for
the trouble that will eventually come knocking.

(1.) See Drilling Down into Computer and Web Trends, at
http://www.learnframe.com/aboutelearning/page16.asp; Bruce W. Sanford
& Michael J. Lorenger, Teaching an Old Dog New Tricks: The First
Amendment in an Online World, 28 CONN. L. REV. 1137, 1137 (1996); Geoff
Thompson, $40,000 Awarded in First Cyberspace Defamation Case,
AUSTRALIAN FIN. REV., May 4, 1994, at S41 ("uninhibited defamation
is one of the things that makes cyberspace such a fun place to
be").

(5.) See the following stories, all in THE RECORDER by Shannon
Lafferty and all available in archive at www.law.com/california:
Defendants Not Nice in Internet Case, November 6, 2001; No Easy Outs
Seen in Suit for Internet Libel, December 12, 2001; Judge Silences
Ravings of Angry Ex-employees, December 13, 2001; Web War of Words
Drawing More Hits, March 26, 2002; Contempt Hearing Set in Internet
Libel Case, March 27, 2002; Court Issues Stay in Case over Web
Defamation, April 18, 2002; FBI Investigating Death Threats in Varian
Libel Case, August 1, 2002. See also www.geocities.com/
mobeta_inc/slapp/slapp.html.

See also RESTATEMENT (SECOND) OF TORTS [section] 569 (1977)
("One who falsely publishes matter defamatory of another in such a
manner as to make the publication a libel is subject to liability to the
other although no special harm results from the publication.")

(17.) See, e.g., Bonheur v. Dresdner Bank, 1986 WL 4702, at *2 n.2
(S.D.N.Y.); Lyrissa Barnett Lidsky, Prying, Spying, and Lying: Intrusive
Newsgathering and What the Law Should Do About It, 73 TUL. L. REV. 173,
198 n.103 (1998). When set against the backdrop of the Internet, libel
is further complicated by a host of knotty, extralegal concerns.

(34.) ComputerXpress Inc. v. Jackson, 113 Cal. Rptr.2d 625
(Cal.App. 2001) (company became matter of public interest merely because
it was "publicly traded company" and "had inserted itself
into the public arena by means of numerous press releases"). The
posted comments were far from innocuous and included the abrasive likes
of the following: "When the people who have ... been duped into
this stock realize the scam they were coaxed into, my guess is there
will be hell to pay."

(41.) Matisse Enzer, Glossary of Internet Terms, available at
www.matisse.net/files/glossary.html#H (updated February 24, 2002). See
also www.netdictionary.com/html/h/html, which defines html as
"[t]ext that includes links or shortcuts to other documents,
allowing the reader to easily jump from one text to related texts, and
consequentially from one idea to another, in a non-linear fashion."

(45.) See Nancy Toross (Note), Double-Click on This: Keeping Pace
with On-Line Market Manipulation, 32 LOY. L.A. L. REV. 1399, 1419 (1999)
(one can "hide his or her identity on the Internet and make
statements on an anonymous or false basis, thus making it difficult to
identify and prosecute"); Shahram A. Shayesteh (Comment),
High-Speed Chase on the Internet Superhighway: The Evolution of Criminal
Liability for Internet Piracy, 33 LOY. L.A. L. REV. 183, 193-94 (1999)
(discussing various means by which Internet users can hide their true
identities).

(59.) Yahoo! is a perfect example. Its terms of service emphasize,
"Yahoo provides its service to you, subject to the following Terms
of Service ... which may be updated by us from time to time without
notice to you." Available at_http://docs.yahoo.com/ info/terms
(visited June 3, 2002) (emphasis added).

(60.) Available at http://privacy.msn.com/tou (last modified March
2002) (emphasis added). Weighing in at a total of nearly 9,000 words,
the MSN terms of use span some 25, single-spaced pages.

(63.) eWatch L.L.C. is perhaps the leading such service.
Information about it is available at http://
ewatch.com/about_ewatch.html (visited June 3, 2002) (describing a range
of corporate intelligence solutions). Another prominent member of this
burgeoning "cottage industry" is Connecticut-based CyberAlert
Inc. See Shaun B. Spencer, CyberSLAPP Suits and John Doe Subpoenas, 19
J. MARSHALL J. COMPUTER & INFO. L. 493,494 n.9 (2001).

(64.) See, e.g., Matthew S. Effland, Digital Age Defamation, 75
FLA. B.J. 63, 63-64 (2001) (observing that damaging comments made by
disgruntled employees about company business practices is not new
phenomena, but suggesting that Internet has magnified problem); Daniel
P. Schafer (Note), Canada's Approach to Jurisdiction over
Cybertorts, 23 FORDHAM INT'L L.J. 1209-10 (2000) ("Since
[Internet] bulletin boards provide an easy and inexpensive way for a
speaker to reach a large audience, disgruntled ... employees have used
them to voice their concerns over a company, regardless if the
complaints are justified.") (footnote omitted).

IADC member Eric W. Wiechmann is a litigation partner of Cummings
& Lockwood, LLC, in the firm's Harford, Connecticut, office. He
is a graduate of Hamilton College (B.A. 1970) and Cornell Law School
(J.D. 1974).

A litigation associate in the firm's Stamford, Connecticut,
office, Thomas G. Ciarlone Jr. was educated at New York University (B.A.
1998) and Cornell Law School (J.D. 2001).

COPYRIGHT 2003 International Association of Defense Counsels
No portion of this article can be reproduced without the express written permission from the copyright holder.